Post on 28-Apr-2018
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MBH1683 | Leading Organisational ChangePrepared by Dr Khairul Anuar
L8 – Culture of Change
www.mba638.wordpress.com
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• recognize the importance of the informal organization and its role in relation
to organizations and change;
• explain the meaning of culture in the context of a range of perspectives
offered by researchers in the field;
• compare and contrast different cultural models and typologies;
• diagnose organizational culture as the first step in the process of culture
change;
• identify the sources, including those of the wider society, from which an
• organization derives its culture in order to understand how culture pervades
all aspects of organizational life;
• examine different cultures in terms of their capacity to help or hinder
organizational change;
• investigate degrees of strategy–culture compatibility and their implications
for large-scale strategic change.
Learning Objectives
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1. The informal organization
2. The meaning of culture
3. Describing organizational culture
4. Dimensions of organisational culture
5. The sources of organizational culture
6. Organizational culture and change
7. Changing organizational culture to bring about organizational
change
8. Comment and conclusions
Content
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• The goals of an organization and its financial resources may
be regarded as fairly understood and explicit elements of
organizational life. These aspects of organizational
functioning can be termed the formal organization.
• Since these more formal organizational features can be
reasonably understood by most people, they are, in the main,
susceptible to the process of planned change (see Lecture 7).
• However, organizational life is not nearly as neat and tidy as
this implies. This has been well expressed by French and Bell
(1990, 1999) in their use of the concept of the informal
organization and the metaphor of the ‘organizational iceberg’.
Figure 4.1 illustrates this idea pictorially.
1. The informal organization
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• The iceberg metaphor can be used to depict two contrasting aspects of
organizational life.
• The first is that part of the iceberg which is visible above the water and is
composed of the more easy-to-see and formal aspects of an organization;
that is those issues that are based on agreed, measurable ouputs/outcomes
relating to how organizational goals and objectives will be met.
• The second is the hidden part of the iceberg that is composed of the more
covert aspects of organizational life. These include the values, beliefs and
attitudes held by management and other employees, the emergent informal
groupings that occur in every organization, the norms of behaviour which
direct how things are done but which are rarely talked about and the politics
of organizational life that are mainly hidden but which, for all that, are a
powerful driver of decisions and actions.
1. The informal organization
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• It is significant that the metaphor of an iceberg not only points to the
overt and covert aspects of organizations but draws attention to the
proposition that the informal systems, as well as being hidden, are
the greater part of the organizational iceberg.
• As with unseen parts of icebergs, organizational cultures may not
become apparent until one collides with them unwittingly. Thus the
difficulties in detecting the extent and characteristics of the hidden
part of the iceberg are analogous to the difficulties encountered in
examining and understanding the more informal, hidden aspects of
organizational behaviour.
• Whether it is wholly true or not, the acceptance that the informal
organization exists and can act powerfully to influence
organizational activity is reason enough to examine how it impinges
upon the extent to which organizations can deal with change.
1. The informal organization
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• Kroeber and Kluckhohn (1952)’s definition:
Culture consists in patterned ways of thinking, feeling and reacting, acquired and transmitted mainly by symbols, constituting the distinctive achievements of human groups, including their embodiment in artifacts; the essential core of culture consists of traditional (i.e. historically derived and selected) ideas and especially their attached values.
• Hofstede (1981)’s definition:
Culture is the collective programming of the human mind that distinguishes the members of one human group from those of another. Culture in this sense is a system of collectively held values.
• Both these definitions refer to culture on the ‘grand scale’. In the first case, the definition refers to characteristics in terms of which different societies differ one from another. In the second case, Hofstede uses his definition to delineate one national culture from another. For instance, his reference to ‘human groups’ is taken to mean groupings based on nationality.
2. The meaning of culture
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• The fact that these elements of culture operate ‘tacitly’ (Louis),
‘unconsciously’ (Schein), or unarticulated (Armstrong), reinforces the
metaphor of the hidden part of the iceberg.
• What is also implicit in the use of this metaphor and these definitions
is that culture is ‘deep-seated’ and is, therefore, likely to be resistant
to change. However, as Bate (1996, p. 28) points out: ‘Culture can
be changed, in fact it is changing all the time.’
• The issue is the degree of change to which culture can be submitted
over the short and long term and the process for doing this.
2. The meaning of culture
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• Much depends on the perspective adopted and the type of change
proposed. Three perspectives can be identified (see Ogbonna and Harris,
1998):
that culture can be managed;
that culture may be manipulated; and
that culture cannot be consciously changed.
• Most of the writing and research concerned with culture change subscribes
to the first two of these perspectives. The last of these might be true if, for
culture change to take place, some external (and perhaps unpredictable)
forces are required to make it.
2. The meaning of culture
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• Methods for describing organizational culture are varied. Some simply list what are seen to be the characteristics of culture. For instance, Brown (1995, p. 8) lists the following:
artefacts
language in the form of jokes, metaphors, stories, myths and legends
behaviour patterns in the form of rites, rituals, ceremonies and celebrations
norms of behaviour
heroes
symbols and symbolic action
beliefs, values and attitudes
ethical codes
basic assumptions
history.
3. Describing organizational culture
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• It is then left to those attempting to describe a culture to frame their
descriptions in terms of these characteristics. This is more or less easily
done according to the precision with which the general characteristics are
set out.
• In addition, not all writers are agreed on what should or should not be
included in any list.
• For instance, a comparison of Brown’s list with that of Robbins (2003, p. 525
– see Illustration 4.1 in the next slide) illustrates well the two parts of the
organizational iceberg in that Brown emphasizes more strongly the more
informal aspects of organizational life while Robbins includes some of the
more formal elements.
• Identifying an organization’s culture using Brown’s list could be done
qualitatively or by constructing some kind of questionnaire type instrument.
Activity 4.1 (next slide) shows how a more quantitative method of
identification can be used. The questionnaire there is based on Robbins’s
rather more precise culture characteristics.
3. Describing organizational culture
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• Models of organizational culture such as those of Brown and
Robbins do not make any attempt to link one culture characteristic
with another. By contrast other writers suggest that different cultural
characteristics are linked to one another through a hierarchy of
‘levels’ of culture.
• An example is shown in Figure 4.2. This illustrates the suggestions
of Hofstede et al. (1990) that culture manifests itself at the deepest
level through people’s values and at the shallowest level in terms of
the things that symbolize those values.
3. Describing organizational culture
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• The cultural web
• It can be seen from Illustration 4.3 (page 147, Senior) that the cultural web
is all-encompassing in the organizational elements that it includes. Johnson
(1990), Johnson and Scholes (1999) and Johnson et al. (2005) draw
attention to the influence of prevailing organizational paradigms (i.e. the
beliefs and assumptions of the people making up the organization) in any
attempt to bring about strategic change.
• The link between the beliefs and assumptions making up the paradigm and
other aspects of organizational functioning is exemplified in the statement
by Johnson et al. (2005, pp. 47–8) that: ‘It would be a mistake to conceive
of the paradigm as merely a set of beliefs and assumptions removed from
organizational action. They lie within a cultural web which bonds them to the
day-to-day action of organizational life.’
• These authors probably do not go as far as Morgan in equating culture fully
with organization, but neither do they completely objectify culture as
separate from other aspects of organizational life.
3. Describing organizational culture
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3. Describing organizational cultureIllustration 4.3 - The cultural web
> Refer the handout, page 147, Senior
> A cultural web of Paper Unlimited, a large UK-based paper distributor
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• The structural view of culture
• Structural views of culture inevitably draw on descriptions of different
structural forms for their expression.
• One of the leading proponents of this view is Handy (1993) who draws on
Harrison’s (1972) studies in this respect.
• Handy refers to organizational culture as atmosphere, ways of doing things,
levels of energy and levels of individual freedom – or collectively, the ‘sets
of values and norms and beliefs – reflected in different structures and
systems’ (p. 180).
• On the basis of Harrison’s studies, he suggests four organizational culture
types. (see See Illustration 4.7, as shown next 4 slides)
• Handy does not claim high levels of rigour for his descriptions has given in
Illustration 4.7, saying that a culture cannot be defined precisely.
• However, these descriptions could be used to determine a particular
organization’s way of doing things.
• Refer handout – Illustration 4.7 (Senior, page 154)
4. Dimensions of organisational culture
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Organizational culture and the external environment
• Deal and Kennedy’s (1982) four culture types of the tough-guy, macho
culture, the work-hard/play-hard culture, the betyour- company culture and
the process culture, link more closely to the external environment (the
marketplace) of the organization.
• The Deal and Kennedy typology
• From their examination of hundreds of companies Deal and Kennedy (1982)
claim to have identified four generic cultures.
4. Dimensions of organisational culture- The Deal and Kennedy typology
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1. The tough-guy, macho culture
• These organizations are peopled with individuals who regularly take high
risks and receive rapid feedback on the outcomes of their actions.
• Examples cited are police departments, surgeons, publishing, sports and
the entertainment industry. In tough-guy, macho cultures the stakes are high
and there is a focus on speed rather than endurance.
• Staff in these cultures tend to be young and financial rewards come early,
but failure is punished severely through ‘the sack’.
• Burnout is likely before middle age is reached. Internal competition and
conflict are normal and this means tantrums are tolerated and everyone
tries to score points off each other. However, while tough-guy cultures can
be highly successful in high-risk, quick-return environments they are less
suited to making long-term investments. Being unable to benefit from
cooperative activity, these organizations tend to have a high turnover of staff
and thus often fail to develop a strong and cohesive culture.
4. Dimensions of organisational culture- The Deal and Kennedy typology
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2. Work hard/play hard culture
• This culture exists in organizations where there is low risk but quick
feedback on actions – the world of sales organizations that incorporate hard
work and fun.
• Examples are Avon, Mary Kay cosmetics and encyclopedia companies as
well as companies such as McDonald’s.
• Persistence, keeping at it and working to recognized procedures are typical
of work-hard/play-hard cultures.
• In these cultures, the risks are small because no individual sale will severely
damage the salesperson. However, being selling oriented, all employees
gain quick feedback on their performance. Heroes in these organizations
are the super salespeople who turn in volume sales.
• Contests, conventions and other means of encouraging intense selling are
used. Yet the culture emphasizes the team because it is the team that
makes the difference, not the achievements of single individuals.
4. Dimensions of organisational culture
- The Deal and Kennedy typology
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3. Bet-your-company culture
• These cultures are typical of organizations where the risks are high and the feedback
on actions and decisions takes a long time. Bet-your-company organizations are
those that invest millions or billions in projects which take years to come to fruition.
• Examples include large aircraft manufacturers such as Boeing, oil companies such as
Mobil and large systems businesses.
• There is a sense of deliberateness that manifests itself in ritualized business
meetings.
• All decisions are carefully weighed and based on considered research. Decision
making tends to be top down, reflecting the hierarchical nature of the organization.
• The survivors in these organizations respect authority and technical competence and
have the stamina to endure long-term ambiguity with limited feedback.
• They will act cooperatively, and have proved themselves over a number of years –
immaturity is not tolerated in this culture.
• Bet-your company cultures lead to high-quality inventions and major scientific
breakthroughs, but their slow response times make them vulnerable to short-term
economic fluctuations in the economy. However, it is said that these companies may
be those that the economy most needs.
4. Dimensions of organisational culture
- The Deal and Kennedy typology
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4. The process culture
• This culture is typical of organizations where there is low risk and slow feedback
on actions and decisions.
• Examples are banks, insurance companies, public and government
organizations and other heavily regulated industries.
• Working with little feedback, employees have no sense of their own
effectiveness or otherwise.
• Consequently they tend to concentrate on the means by which things are done
rather than what should be done. Values tend to focus on technical perfection,
working out the risks and getting the process right. Protecting one’s back is what
most employees will do, so the people who prosper are those who are orderly
and punctual and who attend to detail. The ability to weather political storms and
changes becomes a desirable trait.
• In process cultures there is considerable emphasis on job titles and status and
the signs that symbolize them, such as style of office furniture. Position power is
desired.
4. Dimensions of organisational culture-The Deal and Kennedy typology
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• Deal and Kennedy’s typology was constructed in the early 1980s.
• While the cultural types may still be relevant and can be found in today’s
organizations, it is arguable whether the examples of each type that Deal and
Kennedy give still hold today.
• In later writings (Deal and Kennedy, 2000, p. 169), they also agree that
assumptions from the previous decade needed to be revised.
• For instance, banks (as examples of process cultures) have evolved more into
sales-type organizations but do not, perhaps, yet fit the work-hard/play-hard
culture suggested for sales-oriented companies.
• Figure 4.5 shows Trompenaars and Prud’homme’s (2004, p. 67) depiction of
these four types with more up-to-date examples of each culture. Agencies in the
United Kingdom have become ‘privatized’ in the way they operate and are
moving away from the process-oriented culture of old.
• It is also clear that organizations do not always fit neatly into one typology or
another.
4. Dimensions of organisational culture
-The Deal and Kennedy typology
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• Illustrations 4.9 and 4.10 are summaries of the attempts of
two multinational organizations (from quite different industries)
to introduce overall company cultures from disparate sub-
cultures prevailing among their varied product and
geographical divisions.
• Refer handout, pages 159 & 160 of Senior
5. The sources of organizational culture-The influence of organisational history
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• There is an expanding body of research that claims to
have identified how cultures vary.
• Illustration 4.11 summarizes a frequently referenced
framework – that of Kluckhohn and Strodtbeck (1961) –
who claim there are six basic dimensions that describe
the cultural orientation of societies.
• Refer pages 163 of Senior - handout
5. The sources of organizational culture-The diversity of national cultures
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• It is obvious, from a reading of these descriptions, that variations will
occur within societies as well as between societies.
• However, evidence from a series of well-known pieces of research
(eg. Hofstede, Neuijen, Ohayv and Sanders, 1990) appears to
support the concept of geographically identifiable, culturally
differentiated regions that are based on national boundaries.
5. The sources of organizational culture-The diversity of national cultures
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• The major piece of research referred to was carried out in IBM and
involved the analysis of questionnaires from some 116,000
employees in 50 different countries.
• This analysis resulted in the identification of four dimensions, which
werefound to differentiate national cultural groups. A fifth dimension
based on the philosophy of Confucianism (which Hofstede
categorized as virtue versus truth or, more simply, long-term versus
short-term orientation) was identified by Bond working with a team of
24 Chinese researchers (see Chinese Culture Connection, 1987).
• Illustration 4.12 describes these.
• Refer handout, pages 165 -166, Senior
5. The sources of organizational culture-The diversity of national cultures
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• Figure 4.7 illustrates four possible organizational models that, according to
Hofstede (1991), refer to empirically derived relationships between a
country’s position on the power distance/uncertainty avoidance matrix and
models of organizations implicit in the minds of people from the countries
concerned.
• Hofstede uses the metaphors of a village market, a well-oiled machine, a
pyramid and a family to describe different approaches to organizing.
• Thus, people from countries with a ‘village market’ culture do not appear to
have the same need for hierarchy and certainty as those from a pyramid
type culture. These contrast with people from cultures reminiscent of ‘well-
oiled machines’ – such as West Germany – where hierarchy is not
particularly required because there are established procedures and rules to
which everyone works.
• People who live in countries located in the ‘family’ quadrant – such as India,
West Africa and Malaysia – are said to have an implicit model of
organization that resembles a family in which the owner–manager is the
omnipotent (grand)father.
5. The sources of organizational culture-The diversity of national cultures
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• Wilson and Rosenfeld (1990, p. 237) say: ‘The pervasive nature of
organizational culture cannot be stressed too much. It is likely to affect
virtually all aspects of organizational life.’
• According to Schwartz and Davis (1981, p. 35): ‘Culture is capable of
blunting or significantly altering the intended impact of even well thought-out
changes in an organization.’
• This is a popular view of culture and its implications for instigating any kind
of change are clear. However, as the preceding discussion shows,
organizational culture comes in many forms and, therefore, can be more or
less supportive of change.
• There are a number of different views on the relationship between culture
and change.
• Figure 4.9 depicts various elements of organizational culture as they might
influence organizational change.
6. Organizational culture and change
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• Kanter (1983) gives detailed descriptions of two extremes of organizational culture
that are not only different in structural characteristics but also differ in the underlying
attitudes and beliefs of the people working in them.
• The first she calls a ‘segmentalist’ culture and the other an ‘integrative’ culture.
Illustration 4.15 summarizes the characteristics of these two cultures.
• In addition to the summary of a segmentalist culture given in Illustration 4.15, Kanter
(1983, p. 101) offers the following ten ‘rules for stifling innovation’ as further
elucidation of this concept:
1 Regard any new idea from below with suspicion – because it is new, and because it
is from below.
2 Insist that people who need your approval to act first go through several other levels
of management to get their signatures.
3 Ask departments or individuals to challenge and criticize each other’s proposals.
(That saves you the task of deciding; you just pick the survivor.)
6. Organizational culture and change
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4 Express your criticisms freely and withhold your praise. (That keeps people on their
toes.) Let them know they can be fired at any time.
5 Treat identification of problems as signs of failure, to discourage people from letting
you know when something in their area isn’t working.
6 Control everything carefully. Make sure people count anything that can be counted,
frequently.
7 Make decisions to reorganize or change policies in secret, and spring them on people
unexpectedly. (That also keeps people on their toes.)
8 Make sure that requests for information are fully justified and make sure that it is not
given out to managers freely. (You don’t want data to fall into the wrong hands.)
9 Assign to lower-level managers, in the name of delegation and participation,
responsibility for figuring out how to cut back, lay off, move people around or
otherwise implement threatening decisions you have made. And get them to do it
quickly.
10 And above all, never forget that you, the higher-ups, already know everything
important about this business.
6. Organizational culture and change
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• Changing an organization’s culture is not easy, as Schwartz and Davis
(1981) point out from their observations of change at companies they
researched.
• In relation to one of these – AT&T, which, in the late 1970s, undertook a
large-scale corporate and organizational reorientation – Schwartz and Davis
(1981, p. 31) say:
Despite the major changes in structure, in human resources, and in
support systems, there is a general consensus both inside and outside
AT&T that its greatest task in making its strategy succeed will be its
ability to transform the AT&T culture. It will probably be a decade before
direct judgements should be made as to its success.
• Yet another example they quote is the case where the president of an
engineering company resigned after six years of trying to change the
company’s culture from being production-oriented to being market-oriented.
At this point he reckoned he had managed to dent but not change the
culture.
7. Changing organizational culture to bring about
organizational change
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• Schwartz and Davis devised a means of measuring culture in terms
of descriptions of the way management tasks are typically handled
in company-wide, boss–subordinate, peer and interdepartment
relationships so as to assess the degree of cultural compatibility with
any proposed strategic change.
• Figure 4.10 is an example of Schwartz and Davis’s corporate culture
matrix that they designed to carry out the first part of this process.
• It has been completed for the UK-based division of a company in the
computer services industry.
• Refer handout – Senior, page 180
7. Changing organizational culture to bring about
organizational change
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• Assessing cultural risk helps management pinpoint where
they are likely to meet resistance to change because of
incompatibility between strategy and culture.
• This further allows them to make choices regarding whether
to:
(a) ignore the culture;
(b) manage around the culture;
(c) try to change the culture to fit the strategy; or
(d) change the strategy to fit the culture, perhaps by
reducing performance expectations.
7. Changing organizational culture to bring about
organizational change
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Ignoring the culture
• Ignoring the culture is not recommended unless the organization has
sufficient resources to draw on to weather the subsequent storm and
the possibility of an initial downturn in business.
Managing around the culture
• The second option – managing around the culture – is a real
possibility given that there are, in most cases, more ways than one
of achieving desired goals.
• Figure 4.12 reproduces Schwartz and Davis’s (1981) example of
how to manage around an organization’s culture. This outlines four
typical strategies that companies might pursue and what Schwartz
and Davis call the ‘right’ organizational approaches to implement
them. The final two columns set out the cultural barriers to these
‘right’ approaches and the alternative approaches that could,
therefore, be used.
7. Changing organizational culture to bring about
organizational change
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Changing the culture
• The third option, deliberately changing the culture to fit the desired
strategic changes, is also a possibility and, according to Ogbonna
and Harris (2002, p. 33) is still a popular form of management
intervention.
• However, as much of the literature cautions, this can be an
extremely difficult and lengthy process, particularly if the culture is a
strong one (Scholz, 1987; Furnham and Gunter, 1993).
• Furthermore, there are strong arguments (e.g. Hope and Hendry,
1995) against cultural change as a concept for present-day
organizations given what Hope and Hendry (p. 62) describe as the
move away from the large-scale hierarchies characteristic of the
multinationals of the 1970s and 1980s the much leaner and more
focused units of the 1990s and 2000s.
7. Changing organizational culture to bring about
organizational change
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Changing the strategy to match the culture
• Schwartz and Davis (1981) give the merging of two organizations as
an example of changing the strategy to be more compatible with the
existing cultures.
• This choice for an organization is similar to that of managing around
the culture and further emphasizes the possibilities inherent in the
idea that organizations are able to choose the means by which they
achieve their ends. In addition, those who view culture as a
metaphor for organizations (Morgan, 1986) would find it difficult to
preach wholesale cultural change.
• Some accommodation between changing the culture and adapting
the strategy is more likely to be accepted.
7. Changing organizational culture to bring about
organizational change
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• The concept of culture is complex given its application to societies,
organizations and groups, all of which interact one with another.
• The literature reviewed in this chapter has shown, to a considerable extent,
the enduring differences between national or societal cultures; although
there is evidence that some organizations can operate in very similar ways,
regardless of where their different parts are located.
• The concept of national culture is, of course, not precise, when there are
clearly differences in attitudes and norms of behaviour from one place to
another within the same country.
• Even so, there are some generalizations which can be made and managers
and others must be aware that what they consider the norm might turn out
to be something very different as national boundaries are crossed.
• Furthermore, in identifying key elements of culture, it cannot be assumed
that there is an optimum culture for an organization.
8. Comment and conclusions